Farm Tender

AWB's guide to unlocking cashflow for your business

By Sarah McGrath & Matt Trewin

Putting in a new crop can squeeze the farm finances for many farm businesses. That’s why we are creating new ways for farmers to get access to much-needed cashflow to manage their farm business.

Typically, growers have been able to get easy access to cashflow through Production Advance - a cashflow tool that provides pre-harvest payments to growers who contribute a portion of their crop to a pool. Production Advance has proven popular as it is quick and simple, does not require security, and avoids the need to arrange debt finance through banks and other financial institutions. With growers still committing a portion of their crop to pools as part of a balanced pricing strategy, many have taken up the opportunity to unlock a new source of cashflow in their farming business.

We are now offering growers access to this popular cashflow tool by linking any forward contract for wheat, canola and barley, including PRICE+, Victory®, or standard cash and pool forward contracts to Production Advance. This will give growers more choice in how to manage their cashflow, especially at a time when farm inputs are at their peak.

One important feature of Production Advance is that you’re not limited or restricted to participating suppliers and can be used to cover any cost of producing the crop. This flexibility is important.

The way Production Advance works is simple - it’s not meant to be a complex finance product. For every tonne committed to AWB under a forward contract, a preharvest payment is made for $100 per tonne of wheat or barley and $200 per tonne of canola for the grower to use to produce their crops. There are no set up fees, it really is that simple.

Whether this tool is right to manage your cashflow is dependent on your individual farm business and cashflow needs. What is certain is that growers should consider how their crop can work harder for them in managing their farm finances and cashflow and AWB are proud to give growers with a choice to do just that.